Codes of Conduct — How a Good Sectional Title Managing Agent Will Work for You
Ensuring legal compliance. Building financial sustainability. Performing daily administration. Planning renovations. Enacting resolutions. Settling disputes. Hitting your head against a brick wall.
All of these can easily cause headaches for even the most well-intentioned Trustees, who by law, do the above work not as employees, but as volunteers.
When laws change, it is the Trustees’ duty to stay on top of that. If the Scheme is having financial trouble, it is the Trustees’ duty to find a solution. If the Scheme employs gardeners or security, the Trustees need to keep them well-paid and well-treated. And if something breaks, the Trustees need to have had a plan to replace the damage potentially months before it even happened.
In short, being an effective Trustee is a lot of work, and falling short carries consequences.
Therefore, while appointing a respected member of the community to run said community is wise, it’s even wiser to ensure they have professional backup on board. And wisest still for this backup to be chosen carefully.
A great Managing Agent will help your Sectional Title Scheme achieve clean audits and robust reserve funds, and help your Trustees be the best they can be.
But let’s say you’re the Trustee. Despite the incredible help that Managing Agents can be, you’ve likely heard some horror stories too.
So, how can you tell you’re hiring a good one?
Roles and Basic Qualifications
First things first, this Managing Agent needs to be a registered estate agent and formally trained in at least the UCT short course for scheme management. They must also meet the admin, financial, and legal requirements set by the Property Practitioners Regulatory Authority.
You’re going to be trusting these people with keeping your Scheme above-board. They themselves need to be above-board too.
Speaking of which, the precise role of a Managing Agent will vary depending on the contract you sign with them. Here are the various roles that you may contractually employ the agent in:
- Finance Manager
- Insurance Broker or Agent
- Secretary for Body Corporate Meetings
- Dispute Mediator
- Rule Enforcer
- Legal Aide (in the case of disputes raised to the CSOS, or handling owners holding back on their levies)
A qualified agent will be able to fill one or more of these roles, but the more of these you expect them to fulfil, the more you’ll likely need to pay them. Carefully consider what assistance your Scheme needs before deciding what roles your Managing Agent needs to fulfil.
Then, for the sake of good communication and teamwork, make sure you list these expected roles clearly, and properly include them in the employment contract, so that the Trustees and Managing Agent are on the same page as to who is doing what.
Note that the contract needs to be in line with Management Rules 46 and 47 to be valid.
Beyond that, here are roles your agent generally shouldn’t be expected to fulfil:
- Routine Maintenance Officer
A good agent probably knows maintenance contractors that they can recommend to you, and Rule 46 does empower them to appoint their own supervisors and caretakers, but they themselves aren’t normally involved in the day-to-day physical inspections, repairs, and other maintenance checks that need to be carried out in a Scheme.
In addition, while the agent assists the Trustee(s), they do not replace them. The agent’s role is purely to guide the Trustees of a Scheme while carrying out the directives issued by said Trustees and their Body Corporate.
Although Management Rule 5 allows Managing Agents to also be Trustees IF they own a unit within the Scheme, this can often defeat the point in smaller Schemes. Although positive exceptions exist, it’s generally better to keep the roles separate.
Even if, as you’re about to see, some of the core values do align.
Core Values and Outlooks
Being a Managing Agent is no easy task. Even with the right know-how, it can be difficult to succeed unless one also has the right mindset. Here are some questions to consider when selecting one.
Are They Local?
If not, then are they at least well-connected in the Scheme’s local area? Knowledge of local contractors, insurance firms, and other essential contacts is pivotal for ensuring reasonable or quality service for your Scheme.
Do They Get on Well with People?
The Managing Agent’s role is to assist the Trustees in the areas stipulated in their contract. If the agent isn’t able to build a good rapport with said Trustees, their ability to assist will be diminished.
If you want to contract an agent to assist in financial areas, like levy collection, the ability to get on well with people becomes especially important. If an agent gets people to pay their dues, yet frequently makes them want to move out as a result, then this can eventually be the problem for the Scheme.
One of the greatest strengths of a Sectional Title Scheme is its community. A Managing Agent who knows how to assertively get along with people can do much to keep that community strong.
Are They Good Communicators?
This ties into the above. Communication is of course a two-way street, and under-communicative Trustees can pose a challenge for even the best agents. That said, it’s important for an agent to remain responsive, prompt, and clear in their communication in all situations.
Are They Happy with Unconventional Working Hours?
Being a Managing Agent is seldom a clear-cut nine-to-five job at the best of times. After all, they are there to liaise with and assist Trustees, who themselves are volunteers who likely have their own full-time job to handle.
Agents who aren’t prepared to liaise outside the hours of their Trustees’ day jobs are likely going to have a hard time rendering full assistance in time-sensitive situations.
This is especially true for agents contracted to assist with Body Corporate meetings. These, by nature, happen outside of normal working hours so residents may participate. A good agent needs to be ready to bring their best to these situations, and they’re not so likely to do so if they resent working during the evening.
Do They Value Efficiency?
Probably the most important value for an administrative agent. Sectional Title Schemes come with LOTS of paperwork. If the agent struggles with streamlining processes, they will be limited in their ability to lift burdens off their Trustees.
Are They Proactive?
Whether it’s for the sake of ensuring compliance, or preparing the right contractors for upcoming maintenance, proactivity is an unsung hero amount agent values. Good proactivity isn’t noticed by the typical resident, but it does so, so much to keep their home lives smooth and convenient.
Before deciding on an agent for good, make sure you also consider the following:
- Is the Managing Agent part of NAMA? NAMA has its own code of conduct that encourages professionalism among Managing Agents.
- Is the agent part of the Council of Debt Collectors? If you need your agent to handle levies or arrears at all, this is compulsory.
- Is the agent part of a broader agency? If yes, does it provide fidelity and indemnity insurance for its clients? This is important for any Scheme if an agent makes serious mistakes or goes rogue.
- Finally, is the agent part of another part of the property industry? If yes, this can be a conflict of interest. For instance, an agent heavily involved in maintenance probably isn’t going to get the best contractors for your scheme; they’re more likely to hire the best contractors for themselves.
Of course, this article is not exhaustive. As much as we have covered, there are always nuances to consider. To contact ANGOR with any questions, please go to: https://www.angor.co.za/